Date: Aug. 5, 2024 Contact: newsroom@ci.irs.gov Damian Williams, the United States Attorney for the Southern District of New York, announced that on Friday, August 2, 2024, a jury found Arie Rangott guilty of conspiring to defraud the federal Head Start program, to submit a false document to the federal government, and to obstruct a federal administrative proceeding. Rangott was found guilty following a two-week trial before U.S. District Judge Jennifer H. Rearden and is scheduled to be sentenced on December 10, 2024. U.S. Attorney Damian Williams said: “By secretly exploiting a non-profit entity for personal gain, Arie Rangott defrauded the federal government and undermined the public’s trust in the Head Start program. This Office is committed to pursuing justice against those who place greed above their responsibility to be stewards of federal funds, and I commend our law enforcement partners and the dedicated team of career prosecutors of this Office for their outstanding work.” According to the Indictment, public court filings, and the evidence presented at trial: Between 2021 and January 2023, Rangott was the shadow executive director of a non-profit entity, Project Social Care Head Start Inc. (“PSCHS”), that operated in the New York City area. The U.S. Department of Health and Human Services (“HHS”), which administers the federal Head Start program, annually granted to PSCHS millions of dollars that were to be overseen by an independent board of directors, to be used exclusively on the Head Start program, and from which earning a profit is prohibited by law. Rangott and others conspired to submit numerous fictitious documents to HHS that fraudulently asserted PSCHS had an independent board of directors and had in place controls to guard against fraud, waste, and abuse. In truth, PSCHS had neither an independent board nor sufficient controls in place. Rangott and his co-conspirators used their control over PSCHS to impermissibly direct PSCHS’s Head Start funding to for-profit companies owned by co-conspirators through rampant undisclosed self-dealing. In December 2021, HHS sent a letter to PSCHS detailing several complaints about self-dealing at PSCHS, among other things. In response, Rangott and his co-conspirators prepared and submitted a report to HHS that falsely denied the self-dealing and made other misstatements. Then, in August and September 2022, the HHS Office of the Inspector General opened an investigation into related issues at PSCHS. Rangott and his co-conspirators agreed to obstruct that investigation by lying to the investigators, coordinating stories, and submitting false documents. Several of Rangott’s co-conspirators have pled guilty. Among others, Martin Handler and Menachem Lieberman, each of whom secretly controlled PSCHS and directed PSCHS to steer federal funds to their own for-profit companies, pled guilty in March 2024. Isidore Handler, who played a significant role in falsifying documents submitted to HHS, pled guilty in September 2023. All three await sentencing. Rangott of Toms River, New Jersey, was convicted of conspiracy to defraud the U.S., conspiracy to falsify documents and records, and conspiracy to obstruct an agency proceeding. Each of the three offenses carries a maximum sentence of five years in prison. The maximum sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Mr. Williams praised the outstanding investigative work of the Internal Revenue Service Criminal Investigation (IRS CI), Federal Bureau of Investigation, and the HHS Office of the Inspector General. Mr. Williams also thanked the U.S. Department of Agriculture Office of the Inspector General and the New York City Department of Investigation for their assistance. The prosecution of this case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jacob R. Fiddelman, Catherine Ghosh, Stephanie Simon, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialist Jayda Foote. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
